Accountancy, asked by nitikarani6146, 7 months ago

1) P, Q and Rare running a partnership firm. P is entitled to a commission of 5% of net profit. Pass
the necessary journal entry/entries for recording this commission in the book if profit for the
year amounted to Rs.5,00,000.

Answers

Answered by Munmun57
4

The following rectifying journal entries needs to be passed:-

P's capital A/c Dr. 60,000

Q's capital A/c Dr. 60,000

R's capital A/c Dr. 60,000

To Profit and loss Appropriation A/c 1,80,000

(Being the share of profit wrongly distributed reversed)

Profit and Loss Adjustment A/c Dr. 36,000

To R's capital A/c 36,000

(Being remuneration credited)

Profit and loss Adjustment A/c Dr. 30,000

To P's capital A/c(3,00,000*5%) 15,000

To Q's capital A/c(1,50,000*5%) 7,500

To R's capital A/c(1,50,000*5%) 7,500

(Being interest on capital credited to partners)

Profit and loss Adjustment A/c Dr. 1,14,000

To P's capital A/c 45,600

To Q's capital A/c 45,600

To R's capital A/c 22,800

(Being the divisible profit credited to partners)

Hope this will help you.

Answered by priyaag2102
0

Commission A/c.   Dr. 25,000

     To P's Capital A/c  25,000

Explanation:-

The Commission is an expense for the business in this entry, thus it has to be debited. There is an increase in P's Capital account, hence it implies that there is an increase in liability for the company, thus it has to be credited.

Following is the journal entry in the books of P , Q and R for recording this commission:-

Commission A/c.   Dr. 25,000

     To P's Capital A/c  25,000

We were given:-

Commission =5%

Net profit for the year = Rs. 5,00,000

So, the amount of commission entitled to P:-

  = 5% of net profit

  = 5% of 5,00,000

   =25,000

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